EPS Calculator
Find earnings per share from net income and shares.
Results update as you type.
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How it works
Earnings per share, or EPS, is the portion of a company's profit assigned to each outstanding share of common stock, and it is one of the most quoted numbers in all of investing. This EPS calculator subtracts any preferred dividends from net income, because that money is owed to preferred shareholders first, then divides the remaining profit by the number of common shares outstanding. The result tells you how much the company earned on behalf of each share you might own. EPS matters because it standardises profit across companies of different sizes: a firm earning a billion dollars is not necessarily better for a shareholder than one earning a million if the first has vastly more shares. EPS also feeds directly into the price-to-earnings ratio, the most common valuation yardstick, and analysts obsess over whether reported EPS beats or misses expectations each quarter. Growing EPS over time signals rising profitability per share, though it can be boosted artificially by share buybacks that shrink the share count. Enter net income, any preferred dividends, and shares outstanding, and the calculator returns basic earnings per share.
EPS = (net income − preferred dividends) / shares outstanding
Earnings per share divides the profit available to common shareholders by the number of shares they hold. Preferred dividends are subtracted first because that portion of profit belongs to preferred stockholders, not common ones. Dividing the remaining net income by the shares outstanding gives the profit attributable to each single common share, the figure that underpins the price-to-earnings ratio and much of equity valuation.
Source:Financial statement analysis
We review all our tools from time to time to ensure accuracy.
Worked example
How to use this calculator
- 1
Enter your values
Enter net income and shares outstanding.
- 2
Adjust the options
Adjust preferred dividends (optional) if they apply — sensible defaults are already set.
- 3
Read your result
Earnings per share updates instantly as you type — no button to press.
Frequently asked questions
What is earnings per share?
Earnings per share is the amount of a company's net profit allocated to each outstanding share of common stock. It is calculated by subtracting preferred dividends from net income and dividing by the number of common shares. EPS lets investors compare profitability on a per-share basis and is a core input into valuation ratios such as price-to-earnings.
Why subtract preferred dividends?
Preferred shareholders have a prior claim on profits and receive their fixed dividends before common shareholders get anything. Subtracting preferred dividends from net income leaves only the earnings that genuinely belong to common shareholders, which is what earnings per share is meant to measure. If a company has no preferred stock, you leave this figure at zero and divide net income directly by common shares.
What is the difference between basic and diluted EPS?
Basic EPS uses the current number of common shares outstanding, while diluted EPS also counts shares that could be created from stock options, warrants, and convertible securities. Diluted EPS is lower or equal and shows a more conservative, worst-case figure. This calculator computes basic EPS; for diluted EPS you would add all potentially dilutive shares to the denominator.
How does EPS relate to the P/E ratio?
The price-to-earnings ratio divides a stock's market price by its earnings per share, so EPS is the denominator of that widely used valuation measure. A higher EPS, all else equal, lowers the P/E ratio and can make a stock look cheaper. Because of this direct link, EPS is one of the most closely watched figures each earnings season.
Can EPS be manipulated?
EPS can be flattered without genuine profit growth, most commonly through share buybacks that reduce the share count and therefore raise earnings per share even if total profit is flat. Accounting choices and one-time items can also distort it. For this reason, investors look at EPS trends over several years and alongside cash flow rather than trusting a single quarter's figure.